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Autumn Newsletter 07
In this issue
• Property dealings made easy – take the hassle out of working through the process of selling or buying a home. Embrace a new way of keeping track using methods such as text messaging and emails to ensure you are always in the loop.
• Cash flow is king – following a set of common sense foundation principles can take the sting out of managing the cash flow of a business. By partnering with your client from the very beginning you can ensure a good working relationship that is effective and profitable.
• Avoid shareholder pitfalls – protect your family and business by ensuring that your shareholding is managed the way you would like in the event of you becoming incapacitated in some way.
• Do you think filing an annual return is an inconvenience? – Think again… if you don’t then your company registration will lapse, you may not be able to trade – and someone else could register your company name!
• Recap from last newsletter – an update on e-dealing, the transfer of property electronically.
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Cash flow is king
Running a business can be a very complex undertaking at the best of times, and downright frustrating at the worst! There are many plates to keep spinning at the same time – wouldn’t it be great to be able to do this knowing that the money will keep coming in.
However, we do see business owners and operators who are at their wits end trying to obtain payment for what has been an honest and often hard days’ work. It is only fair that they be paid for services or products supplied in good faith. At the same time it needs to be recognised that we have a culture of finding it one of the more unpleasant tasks having to ask a client for money owed. It is also quite difficult to find the time necessary to do this if you do not have a dedicated staff member to regularly monitor client debts.
We have often had business owners or operators come to us in desperation, in a situation where they need to see us for assistance with debt recovery. However, perhaps the following tips will help to alleviate the headaches associated with this quite common issue.
• Start how you would like to carry on. When you take on a new client, be clear about what you expect of them with regards to payment terms – if you undertake to complete the work on time and within budget, then you have the right to be paid within your terms of payment.
• Be clear about what you expect. Have a written copy of your terms of trade and discuss this with your current or prospective client – get them to sign it if necessary.
A client worth having will respect your requirement for this.
• You are in business to make a profit. Clients worth having are those who are like-minded about their approach to business. Encourage clients to partner with you – these are people with whom you will more likely have a solid future with and who will in turn help you to build a strong foundation for growth and financial sustainability.
• People deal with people. Often in this cynical, technology-driven world we can be forgiven for forgetting that people buy products from, or work with, people. But not forgiven for long, because if your valuable client ‘doesn’t feel the love’, they will walk and go somewhere where they will feel valued. How often have you done the same, feeling like you are not appreciated and therefore given someone knocking on your door that ‘golden’ opportunity. Make sure that your clients feel valued and know how much their business means to you.
• 80% of your business comes from 20% of your customers. Protect your client base by keeping your most profitable clients firmly in mind and practicing a good ‘client retention strategy’. New business is very important for long-term sustainability and protecting the future – however it is infinitely less expensive to keep an existing client that it is to acquire a new one!
• The customer is NOT necessarily always right. Sometimes we find ourselves in a position where we are faced with an unhappy client. It can be a tricky situation, requiring diplomacy and consideration for your client’s position. However, the best resolution is when you have a ‘win-win’ solution, this often requires negotiation and communication - not something all business people are good at. However, good communication with your client usually means that they will be more than willing to discuss a situation rather than ‘throwing their toys out of the cot’ and leaving both parties feeling disadvantaged.
All businesses have cash flow problems at one time or another, but if you follow common sense principles and are organized about debt collection and credit policies it really does pay dividends. Don’t be afraid to ask for assistance from professional advisors and business mentors – this may avoid considerable heartache in the long run.
If you would like to discuss this further, please contact PGL for advice and direction.
Ph 09 415 9321 or www.lawfirm.co.nz
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Welcome to this issue of news from Paul Gallagher Legal. We are now well into the year, and like most we talk with it is 'head down and butt up' as we knuckle down to business. We find ourselves busy with quite a diverse range of work topics that we would like to share with you. We encourage your feedback, so please send us an email to let us know if the information has been interesting and of help to you.
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Property dealings made easy
It can sometimes be a harrowing affair when working through the process of buying or selling a property. There are so many things to consider. Wouldn’t it be great to be able to concentrate on the big things and not have to worry about some of the little things?
Once the ‘deal is done’, an agreement is made with regards to price, and all parties have signed ‘on the dotted’ line there is a way you can be updated with key information without having to chase your real estate agent or lawyer. KeyTrack is an electronic tracking process that keeps all parties up to date with the same information, allowing you as a vendor or purchaser of property to follow your property deal online. This system has some great features and benefits– you can view the progress of the property transaction via secure access in an on-line environment, receiving regular text messages and emails throughout the transaction keeping all parties up to date at key times of the process. No more phoning around trying to track people down. Instead, imagine receiving an email or text message, telling you that your contract has gone unconditional, or that all parties have settled.
Having worked with KeyTrack for over two years and as one of only five (at time of publication) practices on the North Shore currently working with the system, we are very comfortable with the electronically-based process – taking the time necessary to become familiar with the new technology. This means that we are totally up to speed and proficient with the methods by which this works – so you can have peace of mind as you work through the sale or purchase of your home.
Don’t just take it from us though – here is what one of our clients recently had to say about her experience with us:
“I have been a client of your firm since August last year and throughout my dealings with Cherie Gum, I was impressed with your firm's high standard of practice. I believe good PR to be a vital ingredient in any organisation and your firm has definitely got it! I found your front desk girls to be ever so polite and cheery with their greetings over the telephone which made me feel so welcome every time I telephoned. Cherie impressed me with her follow up emails and text messages, which all add up to your firm's high standard of professionalism where the client always feels well looked after and cared for. I certainly did! Your firm also went the extra mile by reducing the cost in my mortgage registration fees, which was very nice of Cherie and which added to the personal touch and when translated meant Cherie was looking after my interest.
I am very fortunate to be dealing with a legal firm such as yours who practice what you preach. My experience with your firm has been all good right from the front desk to Cherie herself. I have met you very briefly Mr. Gallagher, on my way out after my meeting with Cherie, and after speaking to you, I gathered that "Lead by Example" was very much your practice. Your staff are a credit to you and your firm.
I wouldn't hesitate to recommend anyone seeking legal advice to stop at Paul Gallagher Legal first where good service comes with a smile.
I would like to take this opportunity to wish you and your staff a bright and prosperous future.”
Shirley Doraisingam
We can help with your property dealings, so please call us.
Ph 09 415 9321 or www.lawfirm.co.nz
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Avoid shareholder pitfalls.
As a shareholder of a business, how do you ensure that your shareholding is managed the way you would like in the event of you becoming incapacitated in some way?
We don’t like to think of the possibility of something happening to us, but should you be permanently disabled in some way or in the event of your death, what happens to your shareholding? Uncertainty of this can be eliminated if you are clear about what it is you want to happen – thus protecting your family and providing the best possible chance for your business to continue.
By preparing a ‘Buy and Sell Agreement’ you can be clear about your wishes and it is binding on all parties. It outlines the purchase price of the shares on an agreed method of valuation, stipulates that the estate will sell the shares and states that the surviving shareholders will purchase the shares of the deceased/incapacitated. This is a distinct advantage for all concerned including the surviving shareholders.
For the surviving shareholders:
• Prevents introduction of new, unwanted interests
• Ensures continuity of the business without forced reorganisation
• Provides reassurance for business creditors
• All parties know what will happen in advance – the shares have an agreed price
• Surviving shareholders do not need to mortgage personal assets in order to re-purchase the shares
• Funding can be through periodical, relatively small premium payments.
For the estate of the incapacitated or deceased:
• The surviving partner/spouse does not have to step into the business
• The surviving partner/spouse has fair value for shares and can take the value of the shares and not part of the business
• Payment is negotiable either as full payment immediately or part payment over an agreed period
• Avoids the need for negotiation of the value of the shares at an often stressfull time.
So, all in all, there is advantage to all parties to make sure that there is an agreement document drafted in preparation of an unfortunate event. It guarantees continuity of the business, safeguards the future of the remaining shareholders and provides a stress-free way of managing the future of interested parties such as family.
We can assist in all aspects of this for your business, so please call Paul or Cherie to discuss this so you can protect your interests.
Ph 09 415 9321 or www.lawfirm.co.nz
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Do you think filing an annual return is an inconvenience? – Think again
You may think it a senseless task filing a document with the Companies Office which records details which may never change from year to year – but filing this document can be the difference between your Company remaining on the Companies Register or having it ‘struck off’. Having your company struck off the Register is not an expense you wish to incur.
This happened to Mr X who was a Director of a company which owned a property – the very common LAQC. Mr X decided to transfer the property from the company back into his own name. A search of the Companies Register revealed that the company was struck off – why – because an annual return had not been filed for two years. The consequence of this was that Mr X was unable to sign the Transfer as Director of a company that was no longer registered.
In order for Mr X to be able to sign the Transfer as Director of the company, the company had to be restored back to the Companies Register, a process which is both lengthy and costly.
The search of the Companies Register also revealed that the Company name which the company had traded under was now being used by someone else. Mr X had to file a Reservation of Company Name and decide on a new company name.
The cost to Mr X of restoring his company back to the Register including filing annual returns for two years was $485.00 (plus legal costs). There was then a lapse of 25 working days while the Companies Office advertised the Application to Restore the company in a New Zealand wide magazine. So long as there were no objections the company is able to be restored. The whole process takes approximately 6 to 8 weeks.
So as you can see, an annual return is not just an update of the company details - it is the core to your company registration. So for the sake of completing a 2 page document online, at no cost, you can save yourself the cost and inconvenience in having your company struck off. Annual returns are purely an update of company details and do not require any financial details. When you file your Annual Return you can advise the Companies Office that you wish to be reminded by email when your next annual return filing date is due. This is something we would suggest you do.
If a company does not file an annual return on time this indicates to the Registrar that the company is no longer active and should be removed from the register.
Mr X got off relatively lightly as his company was not a trading company. Imagine this happening to a trading company who could no longer trade as a result of being struck off – food for thought.
For more information or advice on any legal or business matters please give us a call.
Ph 09 415 9321 or www.lawfirm.co.nz
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Recap from last newsletter:
In our last newsletter (Christmas 06) we outlined a new electronic method of working through the conveyancing (property-sale-or-purchase) process – commonly called ‘e-dealing’. This method of registering conveyancing documents electronically through an on-line system became mandatory as of 01 May this year for the discharge of mortgage. As reported in the District law Society Newsletter March end many lawyers have still not registered, with some choosing not to undertake to complete conveyancing transactions rather than register. We have found the system easy to work with - the benefit being able to register property transfers instantaneously rather than the cumbersome manual system of old.
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Lucky us!
We’ve been lucky enough to have had some very settled sunny autumn weather.- especially for this time of the year. So, enjoy the temperate climate while it lasts, take the time to sort out the garden and we send our condolences to those of you who are duck-shooting, be patient and we are sure that the weather will come your way soon enough!
Cheers from the team at Paul Gallagher Legal.
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